Arnetia Robinson v. Fed. Housing Fin. Agency, 876 F.3d 220

Background

In 2008 Congress enacted HERA creating FHFA and authorizing it to place Fannie Mae and Freddie Mac (the Companies) into conservatorship; HERA also permitted Treasury to purchase the Companies’ securities for a limited time.
FHFA placed the Companies in conservatorship Sept. 2008; Treasury entered Preferred Stock Purchase Agreements (PSPAs) providing funding in exchange for preferred "government stock," warrants, and dividend rights.
The PSPAs originally required 10% cumulative dividends to Treasury and barred junior dividends until Treasury’s dividends were paid; Treasury’s liquidation preference increased as Companies drew funds.
In August 2012 FHFA and Treasury executed a Third Amendment imposing the so-called “Net Worth Sweep”: quarterly dividends to Treasury equal to the Companies’ net worth minus a shrinking capital reserve, which transferred most accumulated capital to Treasury and precluded junior dividends.
Robinson, a long‑term common stockholder, sued under the APA seeking declaratory and injunctive relief, arguing the Third Amendment exceeded FHFA’s and Treasury’s HERA authority and was arbitrary and capricious; the district court dismissed, and the Sixth Circuit affirmed.

Issues

Issue	Plaintiff's Argument	Defendant's Argument	Held
Whether HERA’s §4617(f) anti‑injunction bar prevents equitable relief to unwind the Third Amendment	Robinson: §4617(f) is inapplicable because FHFA/Treasury exceeded HERA authority; equitable relief is available	FHFA/Treasury: §4617(f) bars relief that would "restrain or affect" FHFA’s conservator powers	Held: §4617(f) bars Robinson’s equitable claims because they would affect FHFA’s exercise of conservatorship powers
Whether FHFA exceeded its statutory conservator authority by agreeing to the Third Amendment	Robinson: The Net Worth Sweep usurped capital, put Companies in de facto liquidation, and exceeded conservator powers	FHFA: HERA grants broad, discretionary conservator powers (may act to preserve/conduct business, in best interests of Companies or FHFA)	Held: FHFA acted within HERA conservator authority; plaintiff did not plausibly allege FHFA exceeded statutory bounds
Whether FHFA violated HERA’s independence provision by ceding to Treasury	Robinson: §4617(a)(7) prohibits FHFA being directed/supervised; she alleges FHFA acted under Treasury’s direction	FHFA: §4617(a)(7) protects FHFA’s independence and does not confer shareholder‑protective rights; plaintiff not in zone of interests	Held: Robinson not within the zone of interests of §4617(a)(7); prudential standing fails
Whether Treasury exceeded HERA authority by (a) effecting a new "purchase" after 2009 or (b) amending PSPAs beyond its rights	Robinson: (a) Third Amendment amounted to purchase of new obligation after statutory deadline; (b) Treasury lacked authority to amend PSPAs	Treasury: (a) no new purchase or additional funds; Third Amendment restructured compensation for existing securities; (b) PSPAs expressly granted amendment rights	Held: Treasury did not exceed HERA authority; Third Amendment was within its contractual rights and not a post‑deadline purchase

Key Cases Cited

Perry Capital LLC v. Mnuchin, 864 F.3d 591 (D.C. Cir. 2017) (interpreting HERA’s anti‑injunction language and FHFA conservator powers)
Freeman v. F.D.I.C., 56 F.3d 1394 (D.C. Cir. 1995) (FIRREA anti‑injunction language bars equitable relief against conservator acting within statutory authority)
Sharpe v. F.D.I.C., 126 F.3d 1147 (9th Cir. 1997) (anti‑injunction bar doesn’t preclude relief where agency acted beyond statutory or constitutional powers)
Cty. of Sonoma v. Fed. Hous. Fin. Agency, 710 F.3d 987 (9th Cir. 2013) (HERA limits judicial interference with FHFA conservatorship actions)
Latin Ams. for Soc. & Econ. Dev. v. Adm’r of Fed. Highway Admin., 756 F.3d 447 (6th Cir. 2014) (standard of review: de novo review of dismissal of APA claims)
Kloeckner v. Solis, 568 U.S. 41 (2012) (courts must follow clear statutory text; remedial changes lie with Congress)